Globalization is becoming more important for the hospitality industry now a days. Due to globalization it is hard to identify a product or service that is not influenced by a cross border transaction (Parker, 2005). Nevertheless, what is meant by globalization? In this essay the meaning of globalization will be find out. First of all the definition of globalization will be explained. Secondly, advantages and disadvantages will be discussed. Furthermore, more information will be given about the relation between globalization and the hospitality industry. The aim of this essay is to analyze the different perspectives about the impact of globalization in the hospitality industry. As a result the question: ‘How does this process affect the hospitality industry’? will be answered.
According to (Parker, 2005) globalization can be defined as: ‘A process whereby worldwide interconnections are virtually every sphere of activity are growing’. This can be seen as an continuous process in business where the boundaries of countries are moving, or disappearing. Globalization involves; economic, political, legal, technological and cultural elements (Parker, 2005). In addition, following Robertsen (2003) globalization is explained as: ‘Widely thought of as involving homogenisation; even more specifically, as a process involving the increasing domination of one societal or regional culture over all others.’
To conclude, globalization is seen as a worldwide process, which affects all elements of a society. Globalization has the intention to forget the local cultures and specific habits in order to adapt to regional or national cultures. This leads to the disappearing of boundaries, which makes it easier to do business with other countries or cultures.
Looking at the advantages, globalization leads to a more financial interconnected world (Schmuckler, 2004). Free trade is one of the biggest benefits, it entails a free way for countries to exchanges goods and resources. This means that the products can be produced for a lower cost price, which is beneficial for the consumers. Globalization reduces geographical inequality. When one country has high unemployment, it can look for employment in another country with higher employment.
Moreover, the production of goods can be divided between all countries. For example, one county is specialized in a specific product, that product will be made in the specific country. This reduces costs, the countries who do not have the resources to produce the product can import the product, and therefore the consumers do not have to pay for the high production costs. Next, it stimulates competition between companies. Boundaries are open, and companies who may first had a monopoly position, are not the only seller anymore. (Pettinger, 2012) In addition, looking at the hospitality industry , more and more people are travelling around the world, which results in an increasing occupation number for hotels.
On the other hand, globalization causes a lot of disadvantages for different countries and the environment. Developed countries gain more advantages of the free trade economy than developing countries. It can be seen as unfair competition, since the developed countries have more resources to use. Furthermore, due to globalization, companies may choose to outsource a department to another country. (Pettinger, 2012) The regulations about the environment in developing countries can be different, and might be less strict, compared to developed countries. Therefore the environment can be seen as a victim of globalization. The division of labour is also seen as an disadvantage. Countries may face difficulties to hold on to their best skilled workers, since other countries attract the best performing employees by offering higher wages. (Pettinger, 2012)
Therefore the hospitality industry is involved in globalization in various extents. As earlier explained, globalization leads to an increasing occupation number for hotels all over the world. The hospitality industry should adapt to different cultures and religions in order to work successfully in a globalized world. Knowledge and information between different countries and cultures can be shared, which makes it easier to deal with other cultures. Different hotel chains focus on different target groups. For example, ‘Intercontinental Hotel Group’ has recently developed the ‘Hualuxe’ concept. This brand focuses on the Chinese travellers. ‘Intercontinental’ found out that the Chinese travellers were not satisfied by the western approach of hospitality. As a solution, ‘Intercontinental’ decided to come up with a brand new concept, to adapt to the wishes of the Chinese travellers. (Intercontinental Hotel Group, 2014)
In conclusion can be said that, globalization is a worldwide process, which has the intention to forget local cultures. Regional, or national cultures are considered more important. Globalization involves advantages and disadvantages. The most important advantage is the free trade economy, this contributes to an easier way of doing business between countries all over the world. However, looking at the disadvantages, globalization is not beneficial for the environment and developing countries. The hospitality industry is affected by globalization in various extents. More and more people are travelling around the world. It is important to adapt to different cultures, to keep the satisfaction of the guests.
Reference list
Intercontinental Hotel Group. (2014). Hualuxe hotels & resorts. Retrieved April 4, 2014, from IHG: http://www.ihgplc.com/index.asp?pageid=856&scmisc=header_ic
Parker, B. (2005). Retrieved March 29, 2014, from Sagepub.com: http://www.sagepub.com/upm-data/23124_Chapter_1.pdf
Pettinger, T. (2012, November). Retrieved April 2, 2014, from Economicshelp: http://www.economicshelp.org/blog/81/trade/costs-and-benefits-of-globalisation/
Robertsen, R., & White, K. E. (2003). Globalization: Global membership and participation. London: Routledge.
Schmuckler, S. L. (2004). Benefits and risks of globalization: Challenges for developing countries. New York: Initiative for policy dialogue.